Glycogen-associated type 1 protein phosphatase (PP1) activity is determined by an isoform of the catalytic subunit complexed with the glycogen-targeting regulatory subunit, and structural alterations of either component could result in the biochemical abnormalities that are characteristic for insulin resistant Pimas. Three genetically distinct PP1 catalytic subunit isoforms are known that may contribute to glycogen-bound PP1 activity (PP1 alpha, PP1 beta, and PP1 gamma), and we have previously determined the exon-intron structure of the genes coding for PP1 alpha (PPP1CA; 7 exons), PP1 beta (PPP1CB, 8 exons), PP1 gamma (PPP1CC, 7 exons), and PP1 regulatory G-subunit (PPP1R3, 4 exons) that we positioned on chromosome 7q. We found a common variant in the 3?-untranslated region (3?-UTR) of PPP1R3 that was associated with insulin resistance and type 2 diabetes, and correlated with variations in PPP1R3 expression. We have now determined that this region in PPP1R3 mRNA is involved in the binding of at least three different proteins, and that the polymorphism further modulates the relative binding of these factors. We hypothesize that this molecular mechanism may explain the contribution of PPP1R3 to insulin resistance and diabetes in the Pimas.